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Bitcoin price falls below $35,000, its lowest since July last year, as ‘extreme fear’ grips traders following biggest interest rate hike of the Federal Reserve for years.
Ethereum and the other top ten cryptocurrencies BNB
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This week’s bitcoin and crypto crash triggered a sharp decline in market sentiment, as measured by the Bitcoin Fear and Green Index which collects data from social media posts, surveys, volatility and of transaction volume. The gauge has now fallen into “extreme fear” territory, dropping further after falling in April.
Stock markets also lost ground this week, with the Nasdaq posting its longest weekly streak of losses since 2012.
“The correlation between cryptocurrency and stocks was discussed in some detail after bitcoin and the tech-heavy Nasdaq showed a higher positive correlation than initially expected,” DailyFX analyst Tammy Da Costa wrote. in comments via email, noting that predictions made before Russia’s war in Ukraine were waged under the assumption that once interest rates begin to rise, supply and demand will meet .
“Over the past week, fundamentals have included interest rate expectations and no one can ignore the ongoing war which continues to put pressure on supply constraints, especially for commodities. “
The market pressure, which is weighing on both crypto and stocks, includes worries about soaring inflation, an increasingly belligerent Federal Reserve, and fears of a pullback in consumer spending.
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The smaller cryptocurrencies that have overtaken Bitcoin and Ethereum in recent months fell harder in this latest crash.
“The future of individual coins or tokens remains uncertain, the law remains in control of these solicitations and endorsement from social media giants such as Elon Musk,” Da Costa added.
Terra’s luna, used to stabilize the price of protocol stablecoins, crashed more than 20% in the past week alone even as the Luna
Some have speculated a “sell off of UST” on the decentralized exchange Curve sparked rumors that the UST could lose its peg to the dollar, in turn causing the price of the luna to drop further. The rumors were dismissed by the creator of Terra Do Kwon on Twitter.